Oregon's largest mental health provider fears bankruptcy

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PORTLAND, Ore. (AP) - Oregon's largest provider of mental health and addiction services says it is on the verge of filing for bankruptcy protection.

Cascadia Behavioral Healthcare serves 23,000 people in the five Oregon counties holding Portland and its suburbs, Salem and Eugene. Most are at or near poverty level.

Earlier this month, the nonprofit company replaced its executive team, and it stopped taking on clients this week.

The new CEO says the agency doesn't have $2 million to pay a bank loan by a Thursday deadline.

"If they call it on Thursday, there is a very high probability if that were to occur that we would file bankruptcy," said Dr. Derald Walker.

Both Multnomah County and state government officials have refused requests for loan guarantees.

Multnomah County officials also met with the lender, Capital Pacific Bank, hoping that it will wait to call the loan so the county can complete a third-party audit of Cascadia's finances and work out a plan to stabilize the mental health system.

The circumstances alarmed advocates of people struggling with depression, alcohol abuse, schizophrenia and other ailments.

"A lot of people are very concerned, very worried," said David Delvallee, executive director for the National Alliance on Mental Illness of Oregon. He fears that clients may struggle to navigate a fragmented mental health system and that other agencies can't easily absorb Cascadia's clients.

Multnomah County urged patients to continue their treatment as normal. It is referring new clients to smaller mental health agencies, and officials are making plans to shift Cascadia's services should other providers fail.

Walker heads a new, three-person executive team. He has held top mental health positions at the county, state and one of the predecessor organizations that became Cascadia. It was created in 2002 after the merger of three providers. It has acquired more, smaller providers and expanded its services.

Cascadia has struggled with a new billing system that cost millions in technology and training, and millions more because of billing mistakes, Walker said.

He called a bankruptcy filing "the worst possible outcome. As to whether Cascadia will continue to exist in two years, I don't know."

Cascadia operates more than 90 facilities in Multnomah, Washington, Clackamas, Marion and Lane Counties, with a $58 million budget in 2008 and about 1,050 employees.